CBS, Comcast Sign 10-Year Contract to Carry TV Shows

Bloomberg

 

CBS Corp., owner of the most-watched U.S. broadcast network, signed a 10-year agreement allowing Comcast Corp. to carry programming from its television stations.

The so-called retransmission consent deal expires in 2020, New York-based CBS said today in a statement. The contract also provides Comcast customers with Showtime Networks, the new Smithsonian channel, expanded distribution of CBS College Sports and more on-demand access to CBS and Showtime online and on TV.

CBS Chief Executive Officer Leslie Moonves, the first broadcast network owner to seek retransmission fees to add to advertising revenue, said the deal boosts the future prospects for such fees and gives long-term stability for the Showtime pay-TV channel. CBS and Comcast’s agreement offers flexibility for making money from shows and movies across new media, including putting programs online for paying cable customers.

“There’s a great deal of flexibility because God knows the world’s going to look very different in 3 years, no less 10 years,” Moonves said in an interview. “There are benchmarks in some of the new-media terms that depend on how the world is going at that point.”

CBS and Philadelphia-based Comcast, the largest U.S. cable company, were able to strike a deal without the disruption in TV service that came during other similar talks this year. The negotiations were wrapped up a year and a half before the expiration of CBS’s prior contract with Comcast, and Showtime’s agreement was up “shortly,” Moonves said.

Good-Faith Talks

Comcast last month pledged to U.S. regulators that it would negotiate in good faith with TV-station owners after its planned takeover of General Electric Co.’s NBC Universal.

“We’re in a marketplace where Comcast is going to be our rival as the owner of NBC, but as a cable carrier there was totally good faith in their negotiations,” Moonves said. “They lived up to their word.”

CBS will likely receive 50 cents a month per subscriber from Comcast starting in 2012, making the contract worth about $75 million that year, estimates Anthony DiClemente, an analyst with Barclays Capital in New York. The fee will steadily rise to more than $1 per subscriber by 2020, he said in a report.

“It’s helpful that it’s a longer term deal because it adds to the predictability of the retransmission consent revenue stream,” DiClemente, who recommends holding the shares, said in an interview. “CBS was able to negotiate pretty healthy escalators in the contract.”

Annual Target

Financial terms weren’t disclosed. CBS has said it’s aiming for $250 million a year in total retransmission fees by 2012, a goal CBS Chief Financial Officer Joseph Ianniello called “conservative” on a February conference call.

“It’s certainly in line with that goal, and that’s all I’m going to say,” Moonves said.

The $250 million goal is calculated based on monthly fees of about 50 cents per subscriber, Ianniello explained at a June analyst conference.

CBS rose 52 cents, or 3.5 percent, to $15.30 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have gained 8.9 percent this year. Comcast climbed 1 cent to $19.48 in Nasdaq Stock Market trading.

CBS plans to report second-quarter earnings after U.S. markets close tomorrow.

CBS Announces 'View'-Like Talk Show

USA Today

Look out, View ladies!

CBS has just announced a new daytime talk show for fall 2010. And it sounds a lot like yours, but bigger. And louder.

It will be a one-hour series (no name yet) co-hosted by Julie Chen, Sara Gilbert, Sharon Osbourne, Holly Robinson Peete, Leah Remini and Marissa Jaret Winokur.

The co-hosts will do exactly what The Viewsters do, according to the press release. They'll "swap stories, challenge each other on issues and engage the studio audience and viewers at home." They'll also interview stars and feature footage from the field and from home, shot by the co-hosts themselves.

Sara Gilbert (Roseanne) is producing and would be one of the featured panelists; The Early Show's Julie Chen (a new mom and wife of CBS chief Leslie Moonves) is another. (Contrary to Page Six, neither Lisa Rinna nor Real Housewives' Bethenny Frankel is involved). A pilot episode will be shot next month and is being considered, along with game show remake Pyramid, for fall as a replacement for cancelled soap opera As the World Turns.

Hulu Said to Be in Talks With CBS, Viacom for Shows as Paid Service Nears

Bloomberg

 

Hulu LLC is in talks with CBS Corp., Viacom Inc. and Time Warner Inc. to add their television shows to the video website’s planned paid subscription service, people with direct knowledge of the discussions said.

CBS, the only one of the four major U.S. broadcast networks without an ownership stake in Hulu, may begin providing programs after the TV season starts in September, said one of the people, who asked not to be identified because the talks are private.

Hulu, which now lets users watch programs for free and gets its revenue from advertising, is seeking new shows to attract paying subscribers. The Los Angeles-based website will also need to renew rights to programs from owners such as NBC at the end of 2011, according to Laura Martin, a Needham & Co. analyst. Hulu’s audience shrank in April after Viacom pulled “The Daily Show with Jon Stewart” and “The Colbert Report.”

“Charging a subscription is possibly Hulu’s best way to improve its library of TV shows and films,” said Tony Wible, an analyst at Janney Montgomery Scott LLC in Philadelphia.

Christina Lee, a Hulu spokeswoman, said the company doesn’t comment on negotiations. Keith Cocozza, a spokesman for Time Warner, declined to comment, as did Kelly McAndrew, a Viacom spokeswoman.

Much of Hulu’s TV programming comes from the broadcast divisions of its owners: News Corp.’s Fox and General Electric Co.’s NBC, the co-founders; and Walt Disney Co.’s ABC. The networks also offer shows on their own websites.

Cable networks, including channels belonging to Hulu’s current owners, have been slower to make shows available online because they don’t want to upset pay-TV operators that provide the bulk of their revenue, Wible said.

“In its current form, Hulu isn’t just a threat to the cable operators, but also to the cable networks,” Wible said.

Revenue-Sharing

The website, a distant second to Google Inc.’s YouTube in online viewers, would share subscriber income to encourage TV programmers to join, said the people, who have taken part in negotiations or were briefed on the talks. When the service begins, Hulu may offer paying customers a deeper catalog and also insert more ads in free shows, the people said. The company has expressed a willingness to increase commercial minutes.

To be successful, Hulu must meet the programmers’ financial demands and not exceed what subscribers will pay, said Barton Crockett, an analyst at Lazard Capital Markets Ltd. in New York.

Viacom, the New York-based owner of MTV and Comedy Central, and Time Warner, parent of TBS and TNT, are seeking arrangements that don’t threaten existing businesses or limit other opportunities, said the people. Time Warner, also based in New York, is focused on TV Everywhere, a service to let cable and satellite pay-TV customers watch shows online at no added cost.

Programming Loss

Hulu, founded in 2007, hasn’t fully recovered from Viacom’s March decision to pull the two cable shows from the service. The site averaged 12.2 million visitors in March and 13.1 million in April, down from 14.1 million in February, before the programs were removed, according to Nielsen Co. data.

The $9.95-a-month service is expected to be called Hulu Plus, the Los Angeles Times reported in April.

New York-based CBS, home to eight of the top 10 scripted shows in prime time, including “CSI” and “NCIS,” would be likely to sign up if there are no demands for online exclusivity, one person said. Hulu and CBS have held on-and-off talks since the site started.

“We have a profitable, non-exclusive distribution strategy on the Web and in the mobile arena,” CBS said in a statement. “We’re in constant discussions with partners and entrepreneurs about how to generate incremental revenue for getting our content to consumers when and where they want it.”

Ad-Supported Model

In a May 5 conference call, CBS Chief Executive Officer Leslie Moonves stressed the importance of maintaining control over the use of its programs, including on its own TV.com site.

Hulu CEO Jason Kilar has said the site’s ad-supported model is profitable on a cash-flow basis.

The website garnered $52.4 million in net revenue in February, with 72 percent going to the content owners, according to estimates from research firm SNL Kagan. That left Hulu with $14.7 million in revenue, $12.6 million in costs and a $2.04 million profit, SNL Kagan calculates.

A subscription fee would address concerns among investors that TV programmers are cannibalizing their businesses by offering shows for free online with fewer ads.

Martin, the Needham analyst in Pasadena, California, says Hulu shows have four minutes of commercials per hour, compared with 16 on broadcast TV.

“Consumers should not be retrained that premium TV content is cheaper on any platform, especially the Internet,” Martin wrote in a June 1 report.

A subscription would put Hulu in more direct competition with Netflix Inc., which supplies online and mail-order access to movies and past-season TV shows starting at $8.99 a month.

Older film titles provide Netflix’s streaming service with an advantage, said Crockett.

“You may still remember a movie that was released 20 years ago and still want to see it,” Crockett said. “Far fewer TV shows fit that description.”

Broadcast Networks in Good Time Slot for Sale

NY Post

 

The upfront presentations may have wrapped up last week, but the broadcast networks' sales pitches may be just beginning.

With General Electric in the process of selling NBC Universal to cable giant Comcast, some Wall Street dealmakers predict Sumner Redstone and Disney will begin debating whether to put CBS and ABC, respectively, on the block.

Among bankers, CBS appears to be garnering the most attention amid signs Redstone these days isn't dismissing out of hand the notion of selling CBS.

"This is a good time to sell a network," said one Wall Street exec. "Retransmission makes it look more interesting. [CBS] has assets in radio but no long-term strategy in cable." Retransmission refers to fees for "retransmission consent," in which cable and satellite operators pay a network a monthly per-subscriber fee to carry the channel on their systems.

Reps for CBS and for Redstone, who is CBS' majority owner, declined to comment.

Meanwhile, ABC's future in the Mouse House is also not guaranteed, with Disney chief Bob Iger said to be taking a hard look at the network.

"There are no guarantees," he said recently about ABC's future at Disney. A source said the issue is what to do with the accompanying stations.

Sources said this year may be broadcast TV's best hope for finding buyers. While the audience tuning in to broadcast TV continues to erode, the Big Four networks -- ABC, CBS, Fox and NBC -- collectively are expected to pull in as much as 20 percent more in ad dollars at this year's upfront than in last year's dismal showing. (News Corp. owns both Fox and The Post.)

Further, the networks are gaining ground in their years-long fight with cable and satellite operators to get paid for their broadcast signal the way ESPN and MTV do.

Analyst Larry Gerbrandt forecasts that networks could each reap up to $400 million in the coming years, thanks to retransmission fees. He predicted that by 2016, the networks' take from retransmission consent could hit $5 billion.

That's good news because these days broadcast networks make little, if any, profit just by airing sitcoms and dramas.

While audiences will still show up in droves for tentpole events like the Super Bowl or an awards show, the increased popularity of cable is eating into broadcast networks' bottom line, which is further hampered by the high costs associated with producing series, steep sports-rights fees and expenses tied to owning a news operation. Also weighing on broadcasters is their ownership of local TV stations, which have been hit hard by the ad slowdown.

Experts said the networks' real money-making opportunities lie in ancillary businesses, such as international syndication, DVDs and other merchandise, and ownership of a network isn't necessary to reap those benefits.

CBS's Showtime Said to Test Online Service for Cable Channel's Subscribers‏

Bloomberg

CBS Corp.’s Showtime is developing an online video service for subscribers, according to a person with knowledge of the plans, joining rival cable channels that are seeking to reach customers away from TV sets.

The service would be similar to the Web access being tested by Time Warner Inc.’s HBO, said the person, who asked not to be identified because the plans aren’t public. Showtime, with 18 million pay-TV subscribers and original shows including “Nurse Jackie” and “Weeds,” hasn’t set a starting date.

Premium cable channels are experimenting with ways to offer service online and to mobile customers without cannibalizing monthly pay-TV subscription fees that contribute the bulk of their revenue. Showtime is discussing the planned service with pay-TV operators that distribute the channel, the person said.

“There’s nothing to announce at this time,” Johanna Fuentes, a spokeswoman for Showtime in New York, said in an interview.

HBO, which along with Cinemax has about 40 million subscribers, in February began offering HBO GO at no additional cost to customers on Verizon Communications Inc.’s FiOS TV service.

“All the HBO subscribers in the United States are going to have HBO programming on demand across every device,” Jeff Bewkes, Time Warner’s chief executive officer, said on a May 5 conference call. “That is a powerful offering.”

Starz, owned by Englewood, Colorado-based Liberty Media Corp., provides shows to Netflix Inc., which offers the cable channel’s content online as part of its monthly movie-rental subscription plans.

Viacom Inc.’s Epix, the premium movie channel first offered in October 2009, includes online access for all customers. Two- thirds have viewed movies online, with an average age of 36, according to a survey released today by Epix.

Epix, also owed by Lions Gate Entertainment Corp. and Metro-Goldwyn-Mayer Inc., has distribution with pay-TV systems including Englewood, Colorado-based Dish Network Corp., Verizon’s FiOS, Cox Communications Inc. and St. Louis-based Charter Communications Inc.

CBS, owner of the most-watched U.S. television network, slid 75 cents, or 5 percent, to $14.21 on May 7 New York Stock Exchange composite trading. Time Warner fell 65 cents to $30.25 and Viacom Class B shares dropped 59 cents to $32.26. All are based in New York.

CBS Loss Narrows as Advertising Revenue Rebounds

Bloomberg / Business Week

CBS Corp., owner of the most-watched U.S. broadcast network, reported a narrower first-quarter loss as advertising sales rebounded.

The net loss of $26.2 million, or 4 cents a share, reflects restructuring and tax related costs, and compares with a loss of $55.3 million, or 8 cents, a year earlier. Sales gained 12 percent to $3.53 billion, New York-based CBS said today in a statement. That exceeded the $3.45 billion average of 14 analysts’ estimates compiled by Bloomberg.

CBS, which generates two-thirds of its revenue from ads, is benefiting from increased marketing by automotive and financial services companies, Anthony DiClemente, an analyst at Barclays Capital in New York, said in an April 23 report. CBS and Time Warner Inc.’s Turner Broadcasting announced a $10.8 billion deal last month to share the cost of carrying the March Madness college basketball tournament.

“Unlike other media companies, margins did not outperform at CBS,” David Joyce, an analyst at Miller Tabak & Co. in New York, said in an e-mail. Revenue beat estimates as all divisions aside from publishing gained, he said.

The results included $57.1 million in restructuring charges and $25.9 million in tax items, according to the statement.

Excluding some items, earnings of 5 cents a share matched the average of 16 analysts’ estimates compiled by Bloomberg.

Entertainment Unit

CBS, controlled by Chairman Sumner Redstone, fell 48 cents, or 3 percent, to $15.10 in extended trading after the results were announced. The shares dropped 62 cents to $15.58 at 4 p.m. in New York Stock Exchange composite trading and have gained 11 percent this year.

CBS and Time Warner’s CNN cable-news channel have discussed ways to cooperate for years, CBS Chief Executive Officer Les Moonves said today on a conference call. Time Warner CEO Jeff Bewkes today said he expects CNN to reach an agreement with a partner within the next year.

Revenue in the entertainment unit, which includes the television network, rose 15 percent to $2.1 billion, reflecting a 25 percent rise in TV ad sales following the broadcast of the Super Bowl. Publishing revenue fell 6 percent to $151.7 million because of the “continued soft retail market.”

CBS Says it Plans to Keep NCAA Tournament

Boston Herald

CBS’ contract to carry the NCAA Tournament runs through 2013, but the NCAA can opt out after this year’s event, which has led to widespread speculation about its near future.

That includes both the possibilities of the NCAA expanding the field to 96 teams and of accepting other offers to televise it, presumably including ESPN.

The look of the 2011 tournament likely won’t take shape until summer, but CBS Sports president Sean McManus said Tuesday the network intends to carry the event "as long as we can."

"We have a history at CBS of keeping the events we want to keep on our network," he said. "We’ve always done a good job of renewing rights. I would like to think that that would follow through the NCAA Tournament also."

(A partnership with another outlet, such as Turner, could help CBS share costs.)

Greg Shaheen, the NCAA’s senior vice present for basketball and business strategies, said, "There is nothing that’s a done deal or decided at this point. We’re full steam ahead with our agreement with CBS through 2013."

But he acknowledged the NCAA has been discussing options with university presidents for months.

The tournament is an important moneymaker, and an expanded field would make it a more valuable TV property.

"It’s important to point out that 90-plus percent of the revenue for the Association comes from 17 days in March and early April," Shaheen said, "and 96 percent of the revenue the Association makes flows through to our membership. So they have a lot at stake here and we are mindful of that every day."

CBS' Controversial Calls

San Francisco Chronicle

The Standards and Practices Department at CBS has had a busy few weeks trying to decide what will and what will not offend us during commercial breaks in today's Super Bowl. This is no small responsibility. The Super Bowl not only draws an audience of 100 million, but it's also the one televised event in which the commercials have become a much-anticipated part of the show. So when CBS decides that Americans can handle a poignant personal appeal against abortion but would be put off by humorous treatments of homosexuality, the broadcast network is offering a commentary on what it sees as the sensibilities of the times.

Censorship can be a dangerous game in this age of the Internet. A quick Google search of "banned Super Bowl ads" will produce links to everything CBS refused to let you see.

The network's two most controversial decisions - to accept the anti-abortion spot with the mother of quarterback Tim Tebow and to reject the ad for the gay dating service Man Crunch - show a curious inconsistency.

Anyone who thinks that sex is out of bounds on CBS Sports has not watched much football this season. Each week brings an onslaught of advertising for erectile dysfunction drugs, often preceded by close-up shots of NFL cheerleaders accentuating their cleavage.

If the CBS concern is about awkwardness with young children, I think most parents would find it easier to deflect - or laugh off - the slapstick Man Crunch ad than explain a narrator's somber warning to seek medical attention "for an erection lasting more than four hours."

In the Man Crunch ad, two jersey-clad guys inadvertently touch hands while reaching into a bowl of chips, then plunge into a comically frenzied make-out session. If history is a guide, commercials featuring women - aimed at heterosexual men - will be far racier. Past Super Bowls have featured ads with a woman flashing her breasts at a congressional hearing and two women tearing each other's clothes off in a mud-bath fight over whether Miller Lite was "great tasting" or "less filling."

At least the Man Crunch stars had the decency to keep their jerseys on.

CBS also refused to air a gay-themed ad titled "Lola," about a retired football player who becomes a lingerie entrepreneur. The network reportedly objected to the "stereotypical tone" in the portrayal of an ex-player with a penchant for pink and frilly outfits.

"Lola" was offered up by GoDaddy, a company that has built its brand identity on Super Bowl Sundays with giggles and jiggles that have nothing to do with its business of selling domain names. GoDaddy's replacement ad reportedly spoofs its push against the boundaries of taste: It plays a mock interview with race-car driver Danica Patrick about the controversy, and ends with a woman ripping off her top to reveal the GoDaddy logo.

So the message from CBS is: Objectification and misogyny are OK; stereotypes are not. Fights and flashes of flesh are fine; madcap makeouts are not.

Most of the pregame controversy has centered on CBS' acceptance of an anti-abortion ad by the conservative group Focus on the Family. The spot features the mother of Heisman Trophy winner Tebow recalling how she was advised by doctors to terminate her pregnancy after contracting dysentery while serving as a missionary in the Philippines in 1987. Pam Tebow ignored that advice, and gave birth to a son who became a star quarterback. He appears in the spot.

Various women's groups have objected to the CBS decision to run the Tebow ad. Planned Parenthood even produced a rebuttal for the Web featuring athletes Sean James and Al Joyner talking about choice and respect for women.

All this furor assures that the chatter will stop in living rooms across the country when "the Tim Tebow ad!" comes on.

I think Americans can handle a little controversy with their football. I don't think Focus on the Family will change many minds for the $3 million it will be paying for each 30 seconds of air time.

However, the most super deal of all was had by Man Crunch, which got a bounty of attention without shelling out a dime to CBS.

Super Bowl Ad Prices Drop; Still Cost Millions

USA Today

The economic slump has prices for Super Bowl commercial time falling for only the second time in its history, but it is still the most expensive on U.S. television.

TNS Media Intelligence said Monday that 30-second commercials during next month's Super Bowl, the highly watched NFL football championship game, are selling for $2.5 million and $2.8 million on the CBS network. That's a drop from last year, when ads averaged $3 million on NBC.

Some big players like Pepsi and General Motors are staying on the sidelines. This leaves holes for smaller companies like Diamond Foods and Dr Pepper Snapple to use the Super Bowl to get their wares in front of 100 million viewers who are practically guaranteed to watch their ads. The annual game's high viewership has made it a platform for companies' most creative ads, to the extent that some viewers who are not sports fans tune in for the commercials more than the game itself.

CBS won't say what it paid for the rights to the Super Bowl. The three networks that now alternate carrying the game, CBS, NBC and Fox, get it in a package along with the games they broadcast through the football season.

It's unclear how much revenue Super Bowl advertising will generate for CBS. Nearly all of the 62 commercial slots have been sold. While not conceding that ad rates have slipped, CBS said the pace of sales has been better than it was for NBC a year ago.

"We believe our pricing is similar and believe we are in a better sellout position than they were at this time going into the game," John Bogusz, executive vice president of sports sales and marketing for CBS Television, said.

In economic downturns, companies are more likely to buy Super Bowl advertising when they want to make an impact by jumpstarting a brand or introducing themselves, said Tim Calkins, a marketing professor at Kellogg School of Management. But it's an expensive proposition for companies like Pepsi and FedEx that would otherwise use the game to simply remind people they're still out there.

He said it's encouraging most of the slots have been filled.

"In a way, Super Bowl advertisers are acting like people are acting in the economy, which is they'll buy only if there's a deal," he said. "If the price is right, people will step up."

About 20% to 25% of each year's Super Bowl advertisers are new, according to TNS. The average tenure for advertisers is three to four years before dropping out.

Big money is at stake. From 1990 through last year, the Super Bowl game has generated $2.17 billion of network sales including 1,400 commercials from 210 advertisers, TNS said.

The 2009 Super Bowl brought in $213 million in advertising revenue — just for ads airing during the game, not pregame or post game. That was a 14% increase from the previous year's $186.3 million, when the average 30-second slot cost $2.7 million.

For the first time in 23 years, PepsiCo won't advertise its Pepsi brand or any other beverages during the game, shifting its ad dollars instead to a new, mostly online marketing effort. But its snack unit, Frito-Lay, will have Doritos commercials in the game.

GM dropped out last year as it teetered on the edge of a bankruptcy that came in June. It had advertised in 11 of the previous 12 years.

CBS Chief Says Leno, NBC Mess Has 'Bruised' Television Industry

LA Times

With the entertainment industry transfixed by the Jay Leno-Conan O'Brien mess, CBS' programming chief said NBC's handling of its talk show hosts has hurt the TV industry.

"A lot of people really saw this as having a pretty negative impact on our business," CBS entertainment president Nina Tassler said this morning at the opening session of the Television Critics Assn. press tour in Pasadena.

She was referring to NBC's move last year that switched Leno from late night to a 10 p.m. weeknight slot, replacing NBC's traditional dramas; O'Brien took Leno's place as "Tonight Show" host. Bowing to pressure from local stations worried about low ratings for "The Jay Leno Show," fourth-ranked NBC now appears to be backpedaling on its decision, although it has yet to announce any schedule changes.

But Tassler sees damage already done, because backing off big-budget dramas has meant many Hollywood professionals lost jobs.

"The unfortunate thing is that our creative community was to some degree somewhat bruised by this," Tassler told reporters. "A lot of people were put out of work." An NBC spokeswoman declined to comment.

Tassler quickly added, however, that her own network has only reaped benefits from the Leno affair, pointing to "better than OK" numbers for two dramas that were new to the 10 p.m. time slot: "The Good Wife" and "The Mentalist."

"Ten o'clock is a great business for us," she said.

So far this season, CBS has remained the most-watched network. But it has had its share of bad news: Tassler confirmed for the first time that the network had canceled "Three Rivers," a medical drama that aired at 9 p.m. Sundays but never quite overcame vexing creative problems.

Meanwhile, Tassler sidestepped a question about "Two and a Half Men" star Charlie Sheen, who was recently arrested on suspicion of domestic violence.

"We're being very sensitive to the fact that this is a very personal and very private matter for Charlie," she said. "There's been no impact on the show right now."

At a later panel, "Two and a Half Men" executive producer Chuck Lorre likewise tread carefully around the subject of Sheen's arrest.

"We put on a show last night, and it went extremely well," he said. "Charlie is a consummate pro."

CBS Enters 42nd Year Of '60 Minutes'

From L.A. Times

As the news show begins its 42nd season (the first since the passing of creator Don Hewitt), it's hot again. They're still using the same recipe, but now there are more cooks in the kitchen.

"60 Minutes" executive producer Jeff Fager, left, goes over a story with
correspondent Scott Pelley. (Carolyn Cole / Los Angeles Times)

Change creeps slowly through the ninth-floor newsroom of the West 57th Street high-rise that houses "60 Minutes," CBS' storied Sunday evening newsmagazine. For decades, the office assignments on Correspondent's Row, a bank of glass-walled rooms facing the Hudson River, were sacrosanct, with the biggest space next to the executive producer belonging to Mike Wallace.

But Wallace's office has been largely empty since the 91-year-old became correspondent emeritus three years ago. Last month, executive producer Jeff Fager quietly decided that it was time for Steve Kroft, the longest serving of the full-time correspondents, to inherit the space.

"This is hallowed ground," said Kroft on a recent afternoon, still surrounded by boxes, the walls empty save for a row of gleaming Emmys lining a high shelf.

What may seem like minor office shuffling is freighted with the symbolism of a generational shift at "60 Minutes," which begins its 42nd season tonight. While Fager stresses that the broadcast is an ensemble effort, he acknowledged that Kroft, a 64-year-old, squared-jawed reporter who got his start sending dispatches from Vietnam, emerged in the last year as the face of the program, in part because of his reports on the financial crisis and his much-watched interviews with candidate and President Obama. "I don't think anyone can tell a story better," Fager said.

Kroft's rising profile is not the only change on the broadcast, the most-watched news program on TV and arguably the only one that still commands a mass audience on a regular basis. For all of its endurance, "60 Minutes" has quietly entered a transitional period. This will be the first season without creator Don Hewitt, who passed away last month at age 86 and had remained a lively presence in the newsroom, even after his retirement in 2004.

And the ranks of correspondents have grown with a batch of younger contributors, bringing the number of reporters to 10 -- almost the size of a football team. The influx troubles the program's veterans, who fret that the program's identity is being blurred.

"I think that the public gets a little confused sometimes," said correspondent Lesley Stahl, sitting in her tidy office down the hall from Kroft.

That's only amped up the famously intense competition among the staff. "We are all trying to find the most compelling stories on Earth, and I think that's something that drives the energy of the broadcast," said correspondent Scott Pelley.

The addition of new contributors is an acknowledgment that there's a limit to "60 Minutes' " reach. For the last decade, the median age of viewers has hovered around 60. (That's a year younger than that of the three evening newscasts, but several years older than other network newsmagazines, according to Nielsen.) One of the show's most recognizable figures is 91-year-old essayist Andy Rooney.

"The cultivation of this new cast of characters is an attempt to lure a younger audience," said Richard Campbell, director of Miami University's journalism program and the author of "60 Minutes and the News: A Mythology for Middle America." The risk, he added, is a dilution of the brand once emblematized by the likes of Wallace and the late Ed Bradley.

The show has long been CBS News' most prestigious property, and last season it managed a rare feat, reversing a nearly decade-long trend of ratings declines. The audience grew to an average of 14.3 million people, up 10% from the year before and the biggest in seven years. The increase came as most other newscasts lost audience, including both "CBS Evening News" and ABC's "World News." Viewers came not only for Kroft's Obama interviews but Katie Couric's exclusive with Capt. Chesley B. “Sully” Sullenberger and Pelley's sit-down with Federal Reserve Chairman Ben Bernanke.

The boost in ratings was particularly sweet for a program that has stayed true to the format that Hewitt hit on four decades ago: a weekly menu of meaty interviews, exhaustive investigative pieces and whimsical features. One of the few big changes was last season's conversion to high definition. In a modern flourish, producers also added a boom camera in the studio that zooms in on the correspondents as they introduce their pieces, seated on a stool instead of a chair. "Whatever the ethos of this broadcast was, it still is, and I think that's the most important thing," said 77-year-old correspondent Morley Safer, who joined the program in 1970, puffing on a cigarette behind his desk.

Competitors such as NBC's "Dateline" and ABC's "20/20," originally modeled after "60 Minutes," now largely pursue crime stories and celebrity interviews. (ABC recently trumpeted Barbara Walters' sit-down with La Toya Jackson.) They average about half the audience of "60 Minutes."

Not all its competitors enjoy the consistent time slot or the lift "60 Minutes" gets from its NFL game lead-in. But above all, it's the program's fervent embrace of hard news that has made it singular -- and the most sought-after platform in television.

Case in point: In early February, weeks after Obama took office, the White House told "60 Minutes" that the president might be available for another sit-down with Kroft. But producers didn't pursue it, because the broadcast already had a big story for that Sunday: Couric's exclusive with Sullenberger. (Kroft interviewed Obama a month later.)

Now the pressure is on "60 Minutes" to keep delivering those kind of must-watch hours, without the benefit of a historic presidential election. "More than ever, people are looking for us to have a big story on Sunday," Fager said. "With that, you create certain expectations."

On a recent cloudy afternoon, Fager sat in his corner office, anxiously mulling which pieces should be featured in the season-premiere episode. The no-nonsense producer with closely cropped hair scanned a run-down that included a story by Kroft about the earning potential of dead celebrities. For all the program's success last season, he worries about it losing its perch.

"I fear it all the time," he said. "I know that we have a huge amount of support from CBS, but you can't ever take that for granted. We're in the business of drawing audience. You're only as good as your next broadcast."

He was leaning toward leading with an exclusive with Gen. Stanley A. McChrystal, the top U.S. and NATO commander in Afghanistan, whose classified assessment about the need for more troops was recently leaked. The piece is a classic "60 Minutes" get: an in-depth profile with a powerful figure, timed for maximum impact. (The McChrystal interview is scheduled for tonight, along with Kroft's "Working Stiffs" story and Safer's interview with Irving Picard, the government-appointed liquidator of Bernard Madoff's assets.)

Fager, who worked as a producer for Kroft and Safer before serving as executive producer of "CBS Evening News" and "60 Minutes II," said he plans to make Afghanistan a major focus on the program this season, eager to challenge the conventional wisdom that the public has tired of the war. Several correspondents spent time in the battlefield this summer, but the McChrystal piece was done by David Martin, the network's national security correspondent, part of Fager's effort to broaden the number of faces on the program by drawing from the entire news division. .

This season, he brought aboard chief national correspondent Byron Pitts, who joins chief foreign affairs correspondent Lara Logan and CNN anchor Anderson Cooper as the program's new generation of contributors. (Pitts is 48, Logan is 38 and Cooper is 42.) "They add a spark to the broadcast," Fager said. "And it's nice to have someone in every age group. That's important -- we have to be thinking about what's happening in the years to come."

Couric, 52, and PBS interviewer Charlie Rose, 67, also contribute to the show, along with the program's regular correspondents: Kroft, Stahl, Pelley, Safer and Bob Simon. (Couric would like to do five or six pieces a year, but Fager said her busy schedule as anchor of "CBS Evening News" makes it difficult. On a white board outside his office listing the staff's current story assignments, she was down for just three.)

Some are unsettled by the burgeoning ranks.

"I think you can go too far in the variety of people," Safer said. "I think to some extent, not just the die-hards, the people who view it pretty often, like the comfort of knowing the people who are reporting."

Kroft was blunter. "I don't like it," he said. "I think the show ought to have a set cast."

Pitts, the newest arrival, said he understands that anxiety. "It seems to me that part of the historic greatness of '60 Minutes' was you have that core of outstanding journalists that the American people can rely on and depend on, and I think that formula has been successful," he said. "But just like every great news organization, you need some arms in the bullpen."

Fager said he's not concerned that the broadcast is overbooked, noting that about 80% of the 100 stories produced each season are by the five main correspondents. Still, the expanded staff has intensified the already-fierce competition to get on the air. Such battles could descend into shouting matches during Hewitt's time; nowadays, the atmosphere is less volatile. The mood in the 75-person newsroom is one of brisk efficiency. "There's very, very little blood," Pelley said. "It's a friendly competition, but each and every one of us really likes to win."

Stahl said she's relieved that the internal jockeying is no longer accompanied by "screaming and yelling" that marked Hewitt's tenure. "Jeff runs a calmer shop," she said, adding that he "is doing a sensational job. It's never easy to come after the genius."

That's not to say Hewitt isn't missed. Last season, he made a point of popping in the office every Monday to congratulate the staff on the previous night's broadcast. "There really is a little bit of him in all of us," said Fager. "I think the reason we're able to maintain our consistency is because he taught us so well."